Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish a Special Segregation Account for a Participant or Pledgee That Is a Derivatives Clearing Organization or Futures Commission Merchant, 51444-51447 [2017-24049]

Download as PDF 51444 Federal Register / Vol. 82, No. 213 / Monday, November 6, 2017 / Notices POSTAL SERVICE Product Change—Priority Mail Express and Priority Mail Negotiated Service Agreement Postal ServiceTM. ACTION: Notice. AGENCY: The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. DATES: Date of notice required under 39 U.S.C. 3642(d)(1): November 6, 2017. FOR FURTHER INFORMATION CONTACT: Elizabeth A. Reed, 202–268–3179. SUPPLEMENTARY INFORMATION: The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on October 31, 2017, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Express & Priority Mail Contract 52 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2018–18, CP2018–40. SUMMARY: Elizabeth A. Reed, Attorney, Corporate and Postal Business Law. of the Act 3 and Rule 19b–4(f)(6) thereunder.4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Clearing Agency’s Statement of the Terms of Substance of the Proposed Rule Change The proposal would add new Rule 37 (Segregated Accounts for Customer Property) to provide that a Participant 5 or Pledgee may establish a specifically designated Account to which Eligible Securities may be credited that the Participant or Pledgee wishes to segregate as the property of its customers that trade commodities, options, swaps, and other products (‘‘Customer Property’’) subject to the Customer Property Segregation Rules.6 Based on this segregation structure and the representations and warranties made by the Participant or Pledgee under the proposed Rule, DTC would, upon the request of the Participant or Pledgee, provide an acknowledgment of the segregation of such Customer Property,7 as further described below. II. Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change [FR Doc. 2017–24039 Filed 11–3–17; 8:45 am] BILLING CODE 7710–12–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81990; File No. SR–DTC– 2017–020] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish a Special Segregation Account for a Participant or Pledgee That Is a Derivatives Clearing Organization or Futures Commission Merchant Pmangrum on DSK3GDR082PROD with NOTICES October 31, 2017. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on October 20, 2017, The Depository Trust Company (‘‘DTC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been prepared by DTC. DTC filed the proposed rule change pursuant to section 19(b)(3)(A) 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 14:48 Nov 03, 2017 Jkt 244001 In its filing with the Commission, DTC included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. DTC has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 3 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 5 Each capitalized term not otherwise defined herein has its respective meaning as set forth in the Rules, By-Laws and Organization Certificate of The Depository Trust Company (the ‘‘Rules’’), available at https://www.dtcc.com/legal/rules-andprocedures.aspx. 6 ‘‘Customer Property Segregation Rules’’ means the rules and regulations of the Commodity Futures Trading Commission (‘‘CFTC’’), relating to the deposit of customer property (including money, securities and other property) held by derivatives clearing organizations (‘‘DCOs’’) or futures commission merchants (‘‘FCMs’’) for customers that trade commodities, options, swaps and other products. 7 U.S.C. 6d; 17 CFR 1.20–1.30, 22, 30. Under the proposed rule change, only Deposited Securities credited to an appropriately designated Account may constitute ‘‘Customer Property’’ for purposes of such Customer Property Segregation Rules; DTC does not, and will not under the proposed rule change, segregate money. 7 See 7 U.S.C. 6d(a)(2); 7 U.S.C. 6d(f); 17 CFR 1.20(d); 1.20(g); 1.26; 22.5; 30.7. 4 17 PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 (A) Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The proposal would add new Rule 37 (Segregated Accounts for Customer Property) to provide that a Participant or Pledgee may establish a specifically designated Account to which Eligible Securities may be credited that the Participant or Pledgee wishes to segregate as Customer Property subject to the Customer Property Segregation Rules. Based on this segregation structure and the representations and warranties made by the Participant or Pledgee under the proposed Rule, DTC would, upon the request of the Participant or Pledgee, provide an acknowledgment of the segregation of such Customer Property, as further described below. A. Background a. DTC Omnibus Account Structure DTC maintains omnibus Accounts for its Participants and Pledgees.8 That is, it 8 DTC holds Eligible Securities collectively on behalf of Participants and reflects the transfer of interests in those Eligible Securities among Participants by computerized book-entry. Eligible Securities Deposited with DTC for book-entry transfer services are registered in the name of its nominee, Cede & Co. (‘‘Cede’’), a New York partnership. When the Eligible Securities are registered in the name of Cede, DTC acquires legal title to the Eligible Securities and, when DTC credits interests in these Eligible Securities to the Securities Accounts of Participants, those Participants acquire a beneficial interest in the Eligible Securities and a Security Entitlement with respect to those Eligible Securities is credited to their Accounts. A Security Entitlement is both a package of personal rights against the securities intermediary [in this case, DTC] and an interest in the property held by the securities intermediary. NYUCC § 8–102(14)(i); NYUCC § 8–102(17) and OFF. CMT. 17. A security entitlement is not, however, a specific property interest in any [security] held by the securities intermediary or by the clearing corporation through which the securities intermediary holds the [security]. NYUCC § 8–102(17) and OFF. CMT. 17. Thus, a Participant does not have a right to any particular security; each Participant has a proportionate interest in the fungible total inventory of the issue held by DTC. Participants, in many cases, are themselves securities intermediaries, maintaining securities accounts for the benefit of their customers, crediting a portion of the amount of any issue of a Security held in their Account(s) to one or more customers, as securities entitlements of their customers against them. That is, their customers are entitlement holders, holding the rights and property interest represented by the amount of the security credited to their account(s) vis a vis the Participant. Some customers of a Participant may also be securities intermediaries, holding on behalf of, and maintaining securities accounts for, their own customers, and so forth. DTC does not know whether a Participant is holding interest in the Securities for itself or on behalf of its customers, as their securities intermediary. This tiered system of intermediaries holding interests in securities for their respective customers is generally described as the ‘‘indirect holding E:\FR\FM\06NON1.SGM 06NON1 Federal Register / Vol. 82, No. 213 / Monday, November 6, 2017 / Notices Pmangrum on DSK3GDR082PROD with NOTICES does not distinguish among Accounts that Participants or Pledgees may use for activities that are proprietary or conducted by the Participant or Pledgee for the benefit of customer(s). The Rules expressly provide that ‘‘[a] Participant or Pledgee which utilizes the services of [DTC] for another Person shall, so far as the rights of [DTC], and other Participants and Pledgees are concerned, be liable as principal.’’ 9 The Rules provide for Segregated Accounts that Participants have typically used to separate Securities held for their customers. The characteristics of a Segregated Account are, chiefly, that DTC has no lien on or claim to the Securities credited thereto to secure any obligation of the Participant to DTC.10 Participants therefore use Segregated Accounts to separately identify customer property.11 The Rules also provide that Securities Pledged to a Pledgee (when credited to the Account of the Pledgee in a Free Pledge or, in a Pledge Versus Payment), are held free of any lien or other interest of DTC.12 Thus, the Pledge mechanism is a tool that may be used by a Pledgee to segregate Securities at DTC. If a Participant or Pledgee holds Segregated or Pledged Securities on behalf of customers, that would be reflected in the accounts maintained by the Participant or Pledgee for its customers. DTC has no knowledge of whether Securities credited in that manner are held by the Participant or system.’’ Id. Any entitlement holder may only assert its rights to a security entitlement against its own securities intermediary; Participants and Pledgees are in contractual privity with DTC; their customers are not and do not have any claim against DTC to the security entitlement of the Participant. Such customers of a Participant would have securities entitlements against the Participant that is acting on their behalf as their ‘‘securities intermediary.’’ Such customers only have rights against the Participant, and not against the Participant’s securities intermediary; i.e., DTC. See NYUCC § 8–503 OFF. CMT. 2. (‘‘The entitlement holder cannot assert rights directly against other persons, such as other intermediaries [DTC] through whom the intermediary [the Participants] holds the positions . . . .’’). Moreover, DTC does not owe any duties to such customers. See NYUCC § 8–115 OFF. CMT. 4. (‘‘[T]his section embodies one of the fundamental principles of the Article 8 indirect holding system rules—that a securities intermediary [DTC] owes duties only to its own entitlement holders [its Participants]’’). 9 Rule 2, section 2, supra note 5. 10 Rule 1, section 1, supra note 5. 11 Participants that are registered broker-dealers use Segregation Accounts as a tool to maintain compliance with their obligations under Rule 15c3–3 of the Act (‘‘Customer Protection Rule’’). 17 CFR 240.15c3–3. The Customer Protection Rule requires, among other things, that broker-dealers maintain control of all fully-paid or excess margin Securities they hold for the accounts of customers. Compliance with those obligations by such brokerdealers is external to DTC. See Rule 2, supra note 5. 12 Rule 4(A), supra note 5. VerDate Sep<11>2014 14:48 Nov 03, 2017 Jkt 244001 51445 Pledgee for customers. It is the sole responsibility of the Participant or Pledgee to maintain appropriate records on its own books to identify customer Securities separately. Segregation Rules prescribe the precise form of Acknowledgment Letter that is required for each the entity type (FCM and DCO) and the type of Customer Property.19 b. Customer Property Segregation Rules of the CFTC Because DTC is agnostic as to whether, when and how any Participant or Pledgee may be utilizing its Account for the benefit of customers, DTC cannot independently verify that any particular Securities are ‘‘customer securities’’ vis` a-vis the Participant or Pledgee. However, FCMs and DCOs have statutory requirements for the separate identification of Customer Property pursuant to the Customer Property Segregation Rules.13 To accommodate this need of certain Participants or Pledgees that are FCMs or DCOs, DTC proposes this rule change, pursuant to which DTC would provide acknowledgment of Customer Property credited to the specified Accounts, in reliance on the representations of the Participant or Pledgee provided in the proposed Rule.14 The Customer Property Segregation Rules require that each FCM and DCO separately account for, and segregate from its own proprietary funds, all money, securities, or other property deposited by futures customers 15 for trading on designated contract markets.16 The Customer Property Segregation Rules also provide that an FCM or DCO may only deposit futures customer property with a bank or trust company, and, additionally, an FCM may deposit with a DCO or another FCM (each, a ‘‘depository’’).17 FCMs and DCOs are required to obtain a written acknowledgment from the depository in which the depository acknowledges and agrees to requirements and conditions set forth below (‘‘Acknowledgment Letter’’).18 The Customer Property c. CFTC Required Acknowledgment Letter Each Acknowledgment Letter must be executed in the form specified in the Customer Property Segregation Rules with no additions, deletions or modifications permitted.20 In the Acknowledgement Letter, the depository is required to acknowledge and agree, among other things: (1) That the FCM/DCO has opened or will open the subject account for the purpose of depositing, Customer Property, as required by Customer Property Segregation Rules, including Regulation 1.20, as amended; (2) that the Customer Property held by the depository after being deposited into the subject account will be separately accounted for and segregated on the depository’s books from the FCM/DCO’s own funds and from any other funds or accounts held by the FCM/DCO in accordance with the Customer Property Segregation Rules; (3) that such Customer Property may not be used by the depository or by the FCM/DCO to secure or guarantee any obligations that the FCM/DCO might owe the depository, and they may not be used by FCM/DCO to secure or obtain credit from the depository; and (4) that the Customer Property in the subject account shall not be subject to any right of offset or lien for or on account of any indebtedness, obligations or liabilities the FCM/DCO has or may have owing to the depository. An FCM Acknowledgment Letter has additional examination, connectivity, and information requirements.21 13 See supra note 6. is proposing this rule change to provide Participants and Pledgees that may be FCMs or DCOs a mechanism to comply with their obligations under the Customer Property Segregation Rules. 15 ‘‘Futures Customer’’ means, with certain exceptions outlined in 17 CFR 1.3(iiii), any person who uses a futures commission merchant, introducing broker, commodity trading advisor, or commodity pool operator as an agent in connection with trading in any contract for the purchase of sale of a commodity for future delivery or any option on such contract. See 17 CFR 1.3(iiii). 16 See 17 CFR 1.20. 17 17 CFR 1.20(d); 1.20(g); 1.26; 22.5; 30.7. An FCM may also deposit customer property at a DCO or another FCM. 18 17 CFR 1.20, 1.26, 30.7. Although the Acknowledgment Letter requirement may relate to DTC, it is the sole obligation of the FCM or DCO. DTC is not subject to the Customer Property Segregation Rules, including without limitation, with respect to the Acknowledgement Letter. 14 DTC PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 B. The Proposed Rule DTC would, pursuant to the proposed rule change, establish an Account type that a Participant or Pledgee could use to segregate its Customer Property and provide DTC with the representations needed in order for DTC to execute FCM and DCO Acknowledgment Letters for such Accounts, as may be requested. Because DTC does not have independent knowledge of whether a Participant or Pledgee is utilizing an 19 The Acknowledgment Letter requirements are set forth in 17 CFR l.20(d) and 1.26 (with respect to futures customer funds), 22.5 (with respect to cleared swaps customer collateral) and 30.7(d) (with respect to 30.7 customer funds-applicable to FCMs only). See Appendices A and B to 17 CFR 1.20; Appendix A to 17 CFR 1.26; Appendix E to 17 CFR 30. 20 17 CFR l.20(d)(2), 22.5(a) and 30.7(d)(2). 21 See Appendix A to 17 CFR 1.20. E:\FR\FM\06NON1.SGM 06NON1 Pmangrum on DSK3GDR082PROD with NOTICES 51446 Federal Register / Vol. 82, No. 213 / Monday, November 6, 2017 / Notices Account for the benefit of customers, in the absence of such representations, DTC would not be able to sign an Acknowledgement Letter. The proposed rule change would add Rule 37 to the Rules, to provide for: (1) The establishment and maintenance by a Participant or Pledgee that is a DCO or FCM (respectively, ‘‘DCO Party’’ and ‘‘FCM Party’’) of one or more segregated Accounts (respectively, a ‘‘Segregated DCO Account’’ or ‘‘Segregated FCM Account’’) for the purpose of holding interests in Customer Property; (2) credits to and debits from Segregated DCO Accounts and Segregated FCM Accounts in the manner otherwise provided by in the Rules and Procedures; (3) the representation of each DCO Party to DTC: i. That the only interests in property that such DCO Party shall cause or allow to be credited to its Segregated DCO Account (or Accounts) shall be interests in Deposited Securities that constitute Customer Property; ii. that interests in Customer Property credited to its Segregated DCO Account (or Accounts) shall not be used by such DCO Party to secure or otherwise guarantee any obligations that such DCO Party might owe to DTC; iii. that interests in Customer Property credited to its Segregated DCO Account (or Accounts) shall not be subject to any right of offset or lien for or on account of any indebtedness, obligations or liabilities that such DCO Party may have owing to DTC; and iv. that DTC shall be entitled to rely on the representations of such DCO Party in connection with any acknowledgment that DTC may be required to provide to such DCO Party and/or the CFTC pursuant to the Customer Property Segregation Rules or for any other purpose; (4) the representation of each FCM Party to DTC: i. That the only interests in property that such FCM Party shall cause or allow to be credited to its Segregated FCM Account (or Accounts) shall be interests in Deposited Securities that constitute Customer Property; ii. that interests in Customer Property credited to its Segregated FCM Account (or Accounts) shall not be used by such FCM Party to secure or otherwise guarantee any obligations that such FCM Party might owe to DTC; iii. that interests in Customer Property credited to its Segregated FCM Account (or Accounts) shall not be subject to any right of offset or lien for or on account of any indebtedness, obligations or VerDate Sep<11>2014 14:48 Nov 03, 2017 Jkt 244001 liabilities that such FCM Party may have owing to DTC; and iv. that DTC shall be entitled to rely on the representations of such FCM Party in connection with any acknowledgment that DTC may be required to provide to such FCM Party and/or the CFTC pursuant to the Customer Property Segregation Rules or for any other purpose; (5) the representation of DTC to each DCO Party that interests in Customer Property credited to the Segregated DCO Account (or Accounts) of such DCO Party: i. May not be used by DTC to secure or guarantee any obligations that such DCO Party might owe to DTC; ii. may not be used by such DCO Party to secure or obtain credit from DTC; and iii. shall not be subject to any right of offset or lien for or on account of any indebtedness, obligations or liabilities such DCO Party may have owing to DTC; provided, however, that this prohibition does not affect the right of DTC to recover funds advanced in the form of cash transfers, lines of credit, repurchase agreements or other liquidity arrangements DTC makes in lieu of liquidating non-cash assets held in the Segregated DCO Account (or Accounts) of such DCO Party or in lieu of converting cash held in the Segregated DCO Account (or Accounts) of such DCO Party to cash in a different currency; (6) the representation of DTC to each FCM Party that interests in Customer Property credited to the Segregated FCM Account (or Accounts) of such FCM Party: i. May not be used by DTC to secure or guarantee any obligations that such FCM Party might owe to DTC; ii. may not be used by such FCM Party to secure or obtain credit from DTC; and iii. shall not be subject to any right of offset or lien for or on account of any indebtedness, obligations or liabilities such FCM Party may have owing to DTC; provided, however, that this prohibition does not affect the right of DTC to recover funds advanced in the form of cash transfers, lines of credit, repurchase agreements or other liquidity arrangements DTC makes in lieu of liquidating non-cash assets held in the Segregated FCM Account (or Accounts) of such FCM Party or in lieu of converting cash held in the Segregated FCM Account (or Accounts) of such FCM Party to cash in a different currency; (7) DTC’s disclaimer of liability: i. To any DCO Party or FCM Party as a result of DTC acting on an instruction from such DCO Party or FCM Party to PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 credit to or debit from interests in Customer Property from a Segregated DCO Account or Segregated FCM Account, respectively; ii. to any DCO Party or FCM Party as a result of (x) any loss or liability suffered or incurred by such DCO Party or FCM Party arising out of or relating to the matters subject to proposed Rule 37, unless caused directly by the gross negligence or willful misconduct of DTC or by a violation of Federal securities law by DTC for which there is a private right of action, or (y) any force majeure, market disruption or technical malfunction that prevents DTC from performing its obligations to such DCO Party or FCM Party pursuant to proposed Rule 37; and iii. to any third party (including without limitation any customer of any DCO Party or FCM Party) for any reason; and a provision stating that in the event of a conflict between proposed Rule 37 and the provisions of any other Rule, the provisions of Proposed Rule 37 would govern. Implementation Timeframe The proposed rule change would be implemented 30 days after the date of filing, or such shorter time as the Commission may designate. 2. Statutory Basis DTC believes that the proposed rule change is consistent with the requirements of the Act, and the rules and regulations thereunder applicable to DTC, in particular section 17A(b)(3)(F) of the Act 22 and Rule 17Ad–22(e)(21) thereunder.23 Section 17A(b)(3)(F) of the Act requires, inter alia, that the rules of the clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions.24 The proposed rule change provides a basis on which DTC may provide Acknowledgement Letters, affording the efficiency of DTC book-entry transfers for securities transactions relating to Customer Property. By establishing special segregated Accounts for Participants and Pledgees to use for Customer Property held at DTC, where they otherwise would have the administrative burden of segregating Customer Property at another depository in compliance with the Customer Property Segregation Rules, proposed Rule 37 is designed to promote the prompt and accurate clearance and settlement of securities transactions, consistent with the requirements of the 22 15 U.S.C. 78q–1(b)(3)(F). CFR 240.17Ad–22(e)(21). 24 15 U.S.C. 78q–1(b)(3)(F). 23 17 E:\FR\FM\06NON1.SGM 06NON1 Federal Register / Vol. 82, No. 213 / Monday, November 6, 2017 / Notices Act, in particular section 17A(b)(3)(F), cited above. Rule 17Ad–22(e)(21) requires, inter alia, that each covered clearing agency establish, implement, maintain and enforce written policies and procedures reasonably designed to be efficient and effective in meeting the requirements of its participants and the markets it serves.25 Pursuant to the proposed rule change, the Rules would be updated to establish a framework for DTC to provide Acknowledgement Letters to Participants and Pledgees who are DCOs or FCMs that would allow them to meet their requirements under the Customer Property Segregation Rules, while utilizing the efficiency provided by DTC book-entry transfers, consistent with the requirements of Rule 17Ad–22(e)(21), cited above. (B) Clearing Agency’s Statement on Burden on Competition DTC does not believe that the proposed rule change would have any impact, or impose any burden, on competition because the proposed Rule and its features would be available to all Participants and Pledgees equally on a non-discriminatory basis. Participants and Pledgees will be charged fees applicable to the maintenance of Accounts and transaction fees that are not different from established published fees. (C) Clearing Agency’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others DTC has not solicited and does not intend to solicit comments regarding the proposed rule change. DTC has not received any unsolicited written comments from interested parties. To the extent DTC receives written comments on the proposed rule change, DTC will forward such comments to the Commission. Pmangrum on DSK3GDR082PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) of the Act 26 and Rule 19b–4(f)(6) thereunder.27 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–DTC–2017–020 and should be submitted on or before November 27, 2017. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.28 Eduardo A. Aleman, Assistant Secretary. Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– DTC–2017–020 on the subject line. SECURITIES AND EXCHANGE COMMISSION Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–DTC–2017–020. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549–1090 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of DTC and on DTCC’s Web site (https://dtcc.com/legal/sec-rulefilings.aspx). All comments received CFR 240.17Ad–22(e)(21). VerDate Sep<11>2014 14:48 Nov 03, 2017 27 17 Jkt 244001 [FR Doc. 2017–24049 Filed 11–3–17; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–81985; File No. SR– NYSEArca–2017–127] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Exchange Calculation of the Intraday Indicative Value for Specified Exchange-Traded Products October 31, 2017. Pursuant to section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on October 20, 2017, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission the proposed rule change as described in Items I and II below, which Items have been prepared by the selfregulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to modify representations made in proposed rule changes previously filed with the Securities and Exchange Commission (‘‘Commission’’) regarding Exchange calculation of the ‘‘Intraday Indicative Value’’ (or comparable intra-day value) for specified exchange-traded products. The proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of 28 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 26 15 25 17 51447 PO 00000 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). Frm 00064 Fmt 4703 Sfmt 4703 E:\FR\FM\06NON1.SGM 06NON1

Agencies

[Federal Register Volume 82, Number 213 (Monday, November 6, 2017)]
[Notices]
[Pages 51444-51447]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24049]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81990; File No. SR-DTC-2017-020]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Establish a Special Segregation Account for a Participant or Pledgee 
That Is a Derivatives Clearing Organization or Futures Commission 
Merchant

October 31, 2017.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 20, 2017, The Depository Trust Company (``DTC'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II and III below, which Items have 
been prepared by DTC. DTC filed the proposed rule change pursuant to 
section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposal would add new Rule 37 (Segregated Accounts for 
Customer Property) to provide that a Participant \5\ or Pledgee may 
establish a specifically designated Account to which Eligible 
Securities may be credited that the Participant or Pledgee wishes to 
segregate as the property of its customers that trade commodities, 
options, swaps, and other products (``Customer Property'') subject to 
the Customer Property Segregation Rules.\6\ Based on this segregation 
structure and the representations and warranties made by the 
Participant or Pledgee under the proposed Rule, DTC would, upon the 
request of the Participant or Pledgee, provide an acknowledgment of the 
segregation of such Customer Property,\7\ as further described below.
---------------------------------------------------------------------------

    \5\ Each capitalized term not otherwise defined herein has its 
respective meaning as set forth in the Rules, By-Laws and 
Organization Certificate of The Depository Trust Company (the 
``Rules''), available at https://www.dtcc.com/legal/rules-and-procedures.aspx.
    \6\ ``Customer Property Segregation Rules'' means the rules and 
regulations of the Commodity Futures Trading Commission (``CFTC''), 
relating to the deposit of customer property (including money, 
securities and other property) held by derivatives clearing 
organizations (``DCOs'') or futures commission merchants (``FCMs'') 
for customers that trade commodities, options, swaps and other 
products. 7 U.S.C. 6d; 17 CFR 1.20-1.30, 22, 30. Under the proposed 
rule change, only Deposited Securities credited to an appropriately 
designated Account may constitute ``Customer Property'' for purposes 
of such Customer Property Segregation Rules; DTC does not, and will 
not under the proposed rule change, segregate money.
    \7\ See 7 U.S.C. 6d(a)(2); 7 U.S.C. 6d(f); 17 CFR 1.20(d); 
1.20(g); 1.26; 22.5; 30.7.
---------------------------------------------------------------------------

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, DTC included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. DTC has prepared summaries, set forth in sections A, B, 
and C below, of the most significant aspects of such statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Purpose
    The proposal would add new Rule 37 (Segregated Accounts for 
Customer Property) to provide that a Participant or Pledgee may 
establish a specifically designated Account to which Eligible 
Securities may be credited that the Participant or Pledgee wishes to 
segregate as Customer Property subject to the Customer Property 
Segregation Rules. Based on this segregation structure and the 
representations and warranties made by the Participant or Pledgee under 
the proposed Rule, DTC would, upon the request of the Participant or 
Pledgee, provide an acknowledgment of the segregation of such Customer 
Property, as further described below.
A. Background
a. DTC Omnibus Account Structure
    DTC maintains omnibus Accounts for its Participants and 
Pledgees.\8\ That is, it

[[Page 51445]]

does not distinguish among Accounts that Participants or Pledgees may 
use for activities that are proprietary or conducted by the Participant 
or Pledgee for the benefit of customer(s). The Rules expressly provide 
that ``[a] Participant or Pledgee which utilizes the services of [DTC] 
for another Person shall, so far as the rights of [DTC], and other 
Participants and Pledgees are concerned, be liable as principal.'' \9\
---------------------------------------------------------------------------

    \8\ DTC holds Eligible Securities collectively on behalf of 
Participants and reflects the transfer of interests in those 
Eligible Securities among Participants by computerized book-entry. 
Eligible Securities Deposited with DTC for book-entry transfer 
services are registered in the name of its nominee, Cede & Co. 
(``Cede''), a New York partnership. When the Eligible Securities are 
registered in the name of Cede, DTC acquires legal title to the 
Eligible Securities and, when DTC credits interests in these 
Eligible Securities to the Securities Accounts of Participants, 
those Participants acquire a beneficial interest in the Eligible 
Securities and a Security Entitlement with respect to those Eligible 
Securities is credited to their Accounts. A Security Entitlement is 
both a package of personal rights against the securities 
intermediary [in this case, DTC] and an interest in the property 
held by the securities intermediary. NYUCC Sec.  8-102(14)(i); NYUCC 
Sec.  8-102(17) and OFF. CMT. 17. A security entitlement is not, 
however, a specific property interest in any [security] held by the 
securities intermediary or by the clearing corporation through which 
the securities intermediary holds the [security]. NYUCC Sec.  8-
102(17) and OFF. CMT. 17. Thus, a Participant does not have a right 
to any particular security; each Participant has a proportionate 
interest in the fungible total inventory of the issue held by DTC.
     Participants, in many cases, are themselves securities 
intermediaries, maintaining securities accounts for the benefit of 
their customers, crediting a portion of the amount of any issue of a 
Security held in their Account(s) to one or more customers, as 
securities entitlements of their customers against them. That is, 
their customers are entitlement holders, holding the rights and 
property interest represented by the amount of the security credited 
to their account(s) vis a vis the Participant. Some customers of a 
Participant may also be securities intermediaries, holding on behalf 
of, and maintaining securities accounts for, their own customers, 
and so forth. DTC does not know whether a Participant is holding 
interest in the Securities for itself or on behalf of its customers, 
as their securities intermediary.
     This tiered system of intermediaries holding interests in 
securities for their respective customers is generally described as 
the ``indirect holding system.'' Id. Any entitlement holder may only 
assert its rights to a security entitlement against its own 
securities intermediary; Participants and Pledgees are in 
contractual privity with DTC; their customers are not and do not 
have any claim against DTC to the security entitlement of the 
Participant. Such customers of a Participant would have securities 
entitlements against the Participant that is acting on their behalf 
as their ``securities intermediary.'' Such customers only have 
rights against the Participant, and not against the Participant's 
securities intermediary; i.e., DTC. See NYUCC Sec.  8-503 OFF. CMT. 
2. (``The entitlement holder cannot assert rights directly against 
other persons, such as other intermediaries [DTC] through whom the 
intermediary [the Participants] holds the positions . . . .''). 
Moreover, DTC does not owe any duties to such customers. See NYUCC 
Sec.  8-115 OFF. CMT. 4. (``[T]his section embodies one of the 
fundamental principles of the Article 8 indirect holding system 
rules--that a securities intermediary [DTC] owes duties only to its 
own entitlement holders [its Participants]'').
    \9\ Rule 2, section 2, supra note 5.
---------------------------------------------------------------------------

    The Rules provide for Segregated Accounts that Participants have 
typically used to separate Securities held for their customers. The 
characteristics of a Segregated Account are, chiefly, that DTC has no 
lien on or claim to the Securities credited thereto to secure any 
obligation of the Participant to DTC.\10\ Participants therefore use 
Segregated Accounts to separately identify customer property.\11\
---------------------------------------------------------------------------

    \10\ Rule 1, section 1, supra note 5.
    \11\ Participants that are registered broker-dealers use 
Segregation Accounts as a tool to maintain compliance with their 
obligations under Rule 15c3-3 of the Act (``Customer Protection 
Rule''). 17 CFR 240.15c3-3. The Customer Protection Rule requires, 
among other things, that broker-dealers maintain control of all 
fully-paid or excess margin Securities they hold for the accounts of 
customers. Compliance with those obligations by such broker-dealers 
is external to DTC. See Rule 2, supra note 5.
---------------------------------------------------------------------------

    The Rules also provide that Securities Pledged to a Pledgee (when 
credited to the Account of the Pledgee in a Free Pledge or, in a Pledge 
Versus Payment), are held free of any lien or other interest of 
DTC.\12\ Thus, the Pledge mechanism is a tool that may be used by a 
Pledgee to segregate Securities at DTC.
---------------------------------------------------------------------------

    \12\ Rule 4(A), supra note 5.
---------------------------------------------------------------------------

    If a Participant or Pledgee holds Segregated or Pledged Securities 
on behalf of customers, that would be reflected in the accounts 
maintained by the Participant or Pledgee for its customers. DTC has no 
knowledge of whether Securities credited in that manner are held by the 
Participant or Pledgee for customers. It is the sole responsibility of 
the Participant or Pledgee to maintain appropriate records on its own 
books to identify customer Securities separately.
b. Customer Property Segregation Rules of the CFTC
    Because DTC is agnostic as to whether, when and how any Participant 
or Pledgee may be utilizing its Account for the benefit of customers, 
DTC cannot independently verify that any particular Securities are 
``customer securities'' vis-[agrave]-vis the Participant or Pledgee. 
However, FCMs and DCOs have statutory requirements for the separate 
identification of Customer Property pursuant to the Customer Property 
Segregation Rules.\13\ To accommodate this need of certain Participants 
or Pledgees that are FCMs or DCOs, DTC proposes this rule change, 
pursuant to which DTC would provide acknowledgment of Customer Property 
credited to the specified Accounts, in reliance on the representations 
of the Participant or Pledgee provided in the proposed Rule.\14\
---------------------------------------------------------------------------

    \13\ See supra note 6.
    \14\ DTC is proposing this rule change to provide Participants 
and Pledgees that may be FCMs or DCOs a mechanism to comply with 
their obligations under the Customer Property Segregation Rules.
---------------------------------------------------------------------------

    The Customer Property Segregation Rules require that each FCM and 
DCO separately account for, and segregate from its own proprietary 
funds, all money, securities, or other property deposited by futures 
customers \15\ for trading on designated contract markets.\16\ The 
Customer Property Segregation Rules also provide that an FCM or DCO may 
only deposit futures customer property with a bank or trust company, 
and, additionally, an FCM may deposit with a DCO or another FCM (each, 
a ``depository'').\17\ FCMs and DCOs are required to obtain a written 
acknowledgment from the depository in which the depository acknowledges 
and agrees to requirements and conditions set forth below 
(``Acknowledgment Letter'').\18\ The Customer Property Segregation 
Rules prescribe the precise form of Acknowledgment Letter that is 
required for each the entity type (FCM and DCO) and the type of 
Customer Property.\19\
---------------------------------------------------------------------------

    \15\ ``Futures Customer'' means, with certain exceptions 
outlined in 17 CFR 1.3(iiii), any person who uses a futures 
commission merchant, introducing broker, commodity trading advisor, 
or commodity pool operator as an agent in connection with trading in 
any contract for the purchase of sale of a commodity for future 
delivery or any option on such contract. See 17 CFR 1.3(iiii).
    \16\ See 17 CFR 1.20.
    \17\ 17 CFR 1.20(d); 1.20(g); 1.26; 22.5; 30.7. An FCM may also 
deposit customer property at a DCO or another FCM.
    \18\ 17 CFR 1.20, 1.26, 30.7. Although the Acknowledgment Letter 
requirement may relate to DTC, it is the sole obligation of the FCM 
or DCO. DTC is not subject to the Customer Property Segregation 
Rules, including without limitation, with respect to the 
Acknowledgement Letter.
    \19\ The Acknowledgment Letter requirements are set forth in 17 
CFR l.20(d) and 1.26 (with respect to futures customer funds), 22.5 
(with respect to cleared swaps customer collateral) and 30.7(d) 
(with respect to 30.7 customer funds-applicable to FCMs only). See 
Appendices A and B to 17 CFR 1.20; Appendix A to 17 CFR 1.26; 
Appendix E to 17 CFR 30.
---------------------------------------------------------------------------

c. CFTC Required Acknowledgment Letter
    Each Acknowledgment Letter must be executed in the form specified 
in the Customer Property Segregation Rules with no additions, deletions 
or modifications permitted.\20\ In the Acknowledgement Letter, the 
depository is required to acknowledge and agree, among other things:
---------------------------------------------------------------------------

    \20\ 17 CFR l.20(d)(2), 22.5(a) and 30.7(d)(2).
---------------------------------------------------------------------------

    (1) That the FCM/DCO has opened or will open the subject account 
for the purpose of depositing, Customer Property, as required by 
Customer Property Segregation Rules, including Regulation 1.20, as 
amended;
    (2) that the Customer Property held by the depository after being 
deposited into the subject account will be separately accounted for and 
segregated on the depository's books from the FCM/DCO's own funds and 
from any other funds or accounts held by the FCM/DCO in accordance with 
the Customer Property Segregation Rules;
    (3) that such Customer Property may not be used by the depository 
or by the FCM/DCO to secure or guarantee any obligations that the FCM/
DCO might owe the depository, and they may not be used by FCM/DCO to 
secure or obtain credit from the depository; and
    (4) that the Customer Property in the subject account shall not be 
subject to any right of offset or lien for or on account of any 
indebtedness, obligations or liabilities the FCM/DCO has or may have 
owing to the depository.
    An FCM Acknowledgment Letter has additional examination, 
connectivity, and information requirements.\21\
---------------------------------------------------------------------------

    \21\ See Appendix A to 17 CFR 1.20.
---------------------------------------------------------------------------

B. The Proposed Rule
    DTC would, pursuant to the proposed rule change, establish an 
Account type that a Participant or Pledgee could use to segregate its 
Customer Property and provide DTC with the representations needed in 
order for DTC to execute FCM and DCO Acknowledgment Letters for such 
Accounts, as may be requested. Because DTC does not have independent 
knowledge of whether a Participant or Pledgee is utilizing an

[[Page 51446]]

Account for the benefit of customers, in the absence of such 
representations, DTC would not be able to sign an Acknowledgement 
Letter.
    The proposed rule change would add Rule 37 to the Rules, to provide 
for:
    (1) The establishment and maintenance by a Participant or Pledgee 
that is a DCO or FCM (respectively, ``DCO Party'' and ``FCM Party'') of 
one or more segregated Accounts (respectively, a ``Segregated DCO 
Account'' or ``Segregated FCM Account'') for the purpose of holding 
interests in Customer Property;
    (2) credits to and debits from Segregated DCO Accounts and 
Segregated FCM Accounts in the manner otherwise provided by in the 
Rules and Procedures;
    (3) the representation of each DCO Party to DTC:
    i. That the only interests in property that such DCO Party shall 
cause or allow to be credited to its Segregated DCO Account (or 
Accounts) shall be interests in Deposited Securities that constitute 
Customer Property;
    ii. that interests in Customer Property credited to its Segregated 
DCO Account (or Accounts) shall not be used by such DCO Party to secure 
or otherwise guarantee any obligations that such DCO Party might owe to 
DTC;
    iii. that interests in Customer Property credited to its Segregated 
DCO Account (or Accounts) shall not be subject to any right of offset 
or lien for or on account of any indebtedness, obligations or 
liabilities that such DCO Party may have owing to DTC; and
    iv. that DTC shall be entitled to rely on the representations of 
such DCO Party in connection with any acknowledgment that DTC may be 
required to provide to such DCO Party and/or the CFTC pursuant to the 
Customer Property Segregation Rules or for any other purpose;
    (4) the representation of each FCM Party to DTC:
    i. That the only interests in property that such FCM Party shall 
cause or allow to be credited to its Segregated FCM Account (or 
Accounts) shall be interests in Deposited Securities that constitute 
Customer Property;
    ii. that interests in Customer Property credited to its Segregated 
FCM Account (or Accounts) shall not be used by such FCM Party to secure 
or otherwise guarantee any obligations that such FCM Party might owe to 
DTC;
    iii. that interests in Customer Property credited to its Segregated 
FCM Account (or Accounts) shall not be subject to any right of offset 
or lien for or on account of any indebtedness, obligations or 
liabilities that such FCM Party may have owing to DTC; and
    iv. that DTC shall be entitled to rely on the representations of 
such FCM Party in connection with any acknowledgment that DTC may be 
required to provide to such FCM Party and/or the CFTC pursuant to the 
Customer Property Segregation Rules or for any other purpose;
    (5) the representation of DTC to each DCO Party that interests in 
Customer Property credited to the Segregated DCO Account (or Accounts) 
of such DCO Party:
    i. May not be used by DTC to secure or guarantee any obligations 
that such DCO Party might owe to DTC;
    ii. may not be used by such DCO Party to secure or obtain credit 
from DTC; and
    iii. shall not be subject to any right of offset or lien for or on 
account of any indebtedness, obligations or liabilities such DCO Party 
may have owing to DTC; provided, however, that this prohibition does 
not affect the right of DTC to recover funds advanced in the form of 
cash transfers, lines of credit, repurchase agreements or other 
liquidity arrangements DTC makes in lieu of liquidating non-cash assets 
held in the Segregated DCO Account (or Accounts) of such DCO Party or 
in lieu of converting cash held in the Segregated DCO Account (or 
Accounts) of such DCO Party to cash in a different currency;
    (6) the representation of DTC to each FCM Party that interests in 
Customer Property credited to the Segregated FCM Account (or Accounts) 
of such FCM Party:
    i. May not be used by DTC to secure or guarantee any obligations 
that such FCM Party might owe to DTC;
    ii. may not be used by such FCM Party to secure or obtain credit 
from DTC; and
    iii. shall not be subject to any right of offset or lien for or on 
account of any indebtedness, obligations or liabilities such FCM Party 
may have owing to DTC; provided, however, that this prohibition does 
not affect the right of DTC to recover funds advanced in the form of 
cash transfers, lines of credit, repurchase agreements or other 
liquidity arrangements DTC makes in lieu of liquidating non-cash assets 
held in the Segregated FCM Account (or Accounts) of such FCM Party or 
in lieu of converting cash held in the Segregated FCM Account (or 
Accounts) of such FCM Party to cash in a different currency;
    (7) DTC's disclaimer of liability:
    i. To any DCO Party or FCM Party as a result of DTC acting on an 
instruction from such DCO Party or FCM Party to credit to or debit from 
interests in Customer Property from a Segregated DCO Account or 
Segregated FCM Account, respectively;
    ii. to any DCO Party or FCM Party as a result of (x) any loss or 
liability suffered or incurred by such DCO Party or FCM Party arising 
out of or relating to the matters subject to proposed Rule 37, unless 
caused directly by the gross negligence or willful misconduct of DTC or 
by a violation of Federal securities law by DTC for which there is a 
private right of action, or (y) any force majeure, market disruption or 
technical malfunction that prevents DTC from performing its obligations 
to such DCO Party or FCM Party pursuant to proposed Rule 37; and
    iii. to any third party (including without limitation any customer 
of any DCO Party or FCM Party) for any reason; and a provision stating 
that in the event of a conflict between proposed Rule 37 and the 
provisions of any other Rule, the provisions of Proposed Rule 37 would 
govern.
Implementation Timeframe
    The proposed rule change would be implemented 30 days after the 
date of filing, or such shorter time as the Commission may designate.
2. Statutory Basis
    DTC believes that the proposed rule change is consistent with the 
requirements of the Act, and the rules and regulations thereunder 
applicable to DTC, in particular section 17A(b)(3)(F) of the Act \22\ 
and Rule 17Ad-22(e)(21) thereunder.\23\
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78q-1(b)(3)(F).
    \23\ 17 CFR 240.17Ad-22(e)(21).
---------------------------------------------------------------------------

    Section 17A(b)(3)(F) of the Act requires, inter alia, that the 
rules of the clearing agency be designed to promote the prompt and 
accurate clearance and settlement of securities transactions.\24\ The 
proposed rule change provides a basis on which DTC may provide 
Acknowledgement Letters, affording the efficiency of DTC book-entry 
transfers for securities transactions relating to Customer Property. By 
establishing special segregated Accounts for Participants and Pledgees 
to use for Customer Property held at DTC, where they otherwise would 
have the administrative burden of segregating Customer Property at 
another depository in compliance with the Customer Property Segregation 
Rules, proposed Rule 37 is designed to promote the prompt and accurate 
clearance and settlement of securities transactions, consistent with 
the requirements of the

[[Page 51447]]

Act, in particular section 17A(b)(3)(F), cited above.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(21) requires, inter alia, that each covered 
clearing agency establish, implement, maintain and enforce written 
policies and procedures reasonably designed to be efficient and 
effective in meeting the requirements of its participants and the 
markets it serves.\25\ Pursuant to the proposed rule change, the Rules 
would be updated to establish a framework for DTC to provide 
Acknowledgement Letters to Participants and Pledgees who are DCOs or 
FCMs that would allow them to meet their requirements under the 
Customer Property Segregation Rules, while utilizing the efficiency 
provided by DTC book-entry transfers, consistent with the requirements 
of Rule 17Ad-22(e)(21), cited above.
---------------------------------------------------------------------------

    \25\ 17 CFR 240.17Ad-22(e)(21).
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    DTC does not believe that the proposed rule change would have any 
impact, or impose any burden, on competition because the proposed Rule 
and its features would be available to all Participants and Pledgees 
equally on a non-discriminatory basis. Participants and Pledgees will 
be charged fees applicable to the maintenance of Accounts and 
transaction fees that are not different from established published 
fees.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    DTC has not solicited and does not intend to solicit comments 
regarding the proposed rule change. DTC has not received any 
unsolicited written comments from interested parties. To the extent DTC 
receives written comments on the proposed rule change, DTC will forward 
such comments to the Commission.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to section 19(b)(3)(A) of the Act \26\ and 
Rule 19b-4(f)(6) thereunder.\27\
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78s(b)(3)(A).
    \27\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-DTC-2017-020 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-DTC-2017-020. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549-1090 on official business days between the hours 
of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of DTC and on DTCC's 
Web site (https://dtcc.com/legal/sec-rule-filings.aspx). All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly.
    All submissions should refer to File Number SR-DTC-2017-020 and 
should be submitted on or before November 27, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-24049 Filed 11-3-17; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.